The number of residential mortgages in negative equity – where a loan is bigger than the home's value - declined to a one-year low of 37,806 at the end of second quarter, official data shows.
Mortgage experts noted a recovery in home prices and a decline in high loan-to-value mortgages. The number of such loans fell 7 percent from 40,741 at the previous quarter's end, accounting for 6.4 percent of total mortgage borrowers. The aggregate value of these loans decreased by about 8 percent to HK$190.2 billion from HK$205.9 billion. Additionally, the unsecured portion of debts dropped to HK$14.3 billion at the end of June, down from HK$16.4 billion at the end of March.
Eric Tso Tak-ming, chief vice president of mReferral Mortgage Brokerage Services, noted that the property market regained momentum after the government's February adjustment of stamp duty bands, leading to a steady rebound in transactions and prices. He added that the private domestic price index has recorded growth for three consecutive months as of June, and negative equity cases may decline further if the market stabilizes in the second half.
Moreover, the Hong Kong Mortgage Corporation reported that new mortgage insurance applications in the first half fell 37.1 percent year-on-year to 3,483 – the lowest first-half figure in nearly nine years.
STAFF REPORTER
